While members of the Paper Stock Industries (PSI) Chapter of the Institute of Scrap Recycling Industries (ISRI), Washington, introduced two new recovered paper grades at the 2015 Paper & Plastics Recycling Conference, hosted by the Recycling Today Media Group Oct. 14-16 in Chicago, PSI members must vote to adopt the changes on the changes in February 2016. 

In the session “PSI Paper Grades – Learn how Specifications may be Changing,” PSI officers updated attendees on the outcomes of the PSI Specifications Summit hosted in Dallas in February 2015. Nearly 150 people from more than 70 organizations participated in the summit, said Sandy Rosen, PSI president. After that meeting, Rosen said, committee members read through the numerous suggestions and ideas that were submitted throughout the event.

Johnny Gold, president of The Gold Group Recycling Consultants LLC, Massachusetts, told PSI members in attendance at the Paper & Plastics Recycling Conference session that hearing from them is essential in deciding grade specifications. “We’ll keep taking feedback until we get this right … Only active member companies will be able to vote on adopting changes.”

The two new recovered paper grades introduced by PSI derive from single-stream material recovery facilities (MRFs): sorted clean news (SCN) and sorted residential paper (SRP).

SCN replaces No. 9 news, according to PSI, and is “paper going off the end of the line.”

 

PSI described SCN as: “Consists of unsold and sorted used newspapers from source separated collection programs, converters, drop-off centers and paper drives containing the normal percentages of roto gravure, colored and coated sections. May contain inserts that would normally be included in the newspaper in the proper proportions. Grade must be free of excessive ink, brown grades and nonpaper material. Some mills may require pack to be free of flexographic inks.” Prohibited materials are not permitted and out-throws may not exceed 0 percent.

SRP is nearly the same as sorted mixed paper, however, brown grades are not removed from the mix. As PSI explained, the proposed grade  “consists of sorted newspapers, junk mail, magazines, printing and writing papers and other acceptable papers generated from residential programs (such as residential household and apartment collections and drop-off centers) sorted and processed at a recycling facility. Material should be free of containerboard and brown grades (old corrugated containers [OCC], kraft bags, boxboard and kraft carrier board). Prohibited materials may not exceed 2 percent (including was and foil papers and other nonpaper materials) and out-throws may not exceed 3 percent (including corrugated, kraft bags/board, polycoated)."

PSI also introduced two new mixed grades: sorted mixed paper and sorted hard mix.

 

Sorted mix paper “consists of all paper and paperboard of various qualities not limited to the type of fiber content, as typically generated by residential programs (such as residential, household and apartment collections and drop-off centers) sorted and processed at a recycling facility,” PSI said. Prohibitive materials may not exceed 2 percent and out-throws may not exceed 3 percent.

Sorted hard mix consists of OCC, other brown grades and grocery bags, boxboard cartons and household papers. The mix will be sorted at MRFs and may contain up to 10 percent white or colored papers. Prohibitive materials may not exceed 1 percent with out-throws plus prohibitives not allowed to exceed 5 percent.

Kari Talvola of Burlingame, California-based Fibre Trade Inc., another speaker during the PSI specifications session at the Paper & Plastics Recycling Conference, clarified that these grades “are a guideline. This isn’t set in stone.” Talvola serves as PSI’s specifications committee chair.

ISRI’s board must approve specifications changes at a vote at the ISRI Convention & Exposition in Las Vegas, April 2-7, 2016. Prior to that meeting, the specifications will be reviewed at the ISRI Winter Board Meeting, scheduled for Jan. 20-22, 2016, in New York City, and then again at the Specifications Summit, Febr. 3-5, 2016, in New Orleans, where the changes will be voted on by the PSI membership, according to PSI.

ISRI Paper Division Chair Myles Cohen, president of Pratt Recycling, a subsidiary of Pratt Industries, Conyers Georgia, and a panelist in the specifications session, said people rely on PSI for specifications decisions. “Lots of people feel we are the go-to organization for standards and specifications,” Cohen said, adding “There’s a tremendous amount of data to back up the work [PSI members] have been doing.”

In addition to reviewing new paper grades, PSI members described a trial the group conducted of domestic OCC versus foreign OCC. The group encouraged attendees to try a similar trial as PSI found that domestic OCC “ran very consistently.”

PSI members said the group ran domestic OCC for 24 hours and foreign OCC for 24 hours. The results yielded a loss of fiber on foreign OCC that was 99 percent worse than domestic. Foreign OCC resulted in a 14 percent reduction in speed while fiber quality characteristics “ring crush” and “g-mean tensile” were out of spec, causing the trial to be abandoned after eight hours, PSI members said.

PSI President Rosen also honored industry veteran Pete Grogan with the Phil Alpert Memorial Award during the paper grades specifications session. Grogan, who had worked for Weyerhaeuser, Federal Way, Washington, for years, now serves as the manager of market development and innovation at International Paper, headquartered in Memphis, Tennessee.

The 2015 Paper & Plastics Recycling Conference was at the Marriott Downtown Magnificent Mile in Chicago. Next year’s conference will be Oct. 19-21 at the same venue. More information will be available at www.RecyclingTodayEvents.com as it is confirmed.

 

 

When it comes to the recovered paper prices published monthly by Boston-based research firm RISI, recyclers should use the figures as a benchmark only in comparing markets and in negotiations, not as an absolute, according to RISI representatives who spoke during the session “Recovered Paper Pricing” at the 2015 Paper & Plastics Recycling Conference, hosted by the Recycling Today Media Group in Chicago Oct. 14-16.

Todd Petracek, vice president of markets and compliance for RISI, presented on the firm’s methodology. He explained to a packed room of attendees that a challenge for the information provider has been recyclers relying strictly on the recovered paper prices presented each month through RISI’s PPI (Pulp & Paper International) magazine. “Anyone who is tying all of their prices to PPI … don’t,” Petracek said.

He explained how if everyone involved in recovered paper pricing based their prices on what RISI publishes, “Then the market isn’t really doing its job.”

Petracek continued, “We have trouble finding open market transactions. If people are going to use our prices in their agreements, that’s fine. That’s great, just don’t do it for all of your agreements.”

He added, “We want to make sure there is some open market where prices really are being negotiated, that’s what we can report on.”

Petracek noted several ways recyclers can use the monthly published prices to their advantage, including the prices serving as a good starting point for negotiations. This can help to make the overall process easier, he said. “If the buyer and the seller see what RISI has come out with, that’s the starting price for negotiations. They can get to a final price easier than if they didn’t have that benchmark."

Recyclers also can get a different view of what’s going on in the market, whether other prices are up or down, Petracek said. “How does that compare to what I’m seeing in the markets?”

Another approach to using RISI prices, Petracek said, is to base them on a predetermined formula. This method involves taking the prices RISI publishes and adding here or subtracting there to set an agreed-upon formula. “That can be helpful and can take away any need to negotiate every month because of the agreement,” Petracek said, adding, “The one caveat is to not to do that all the time.”

He continued, “There are a lot of agreements out there based on the prices that we publish and when people do that they’re essentially leaving the price discovery to other people.”

During the Q&A period after Petracek’s presentation, one audience member questioned RISI’s wording and asked if there was a way to make the information “more relatable and understandable” to the average person?

In an interview with Recycling Today Media Group Associate Editor Megan Workman following the recovered paper pricing session, Petracek chuckled when asked this question again as he said it caused him to do some thinking and ultimately make some changes.

RISI has been working on a draft of a document that will explain the firm’s pricing standards and procedures. Petracek said after the “Recovered Paper Pricing” session he went back to his hotel room and brainstormed how to make the information more comprehensible. The result: RISI will now include one page in its methodology document that “really boils it down," he said.

“I actually appreciated that question from the gentleman in the audience. I realized that the presentation I had given on RISI’s methodology was theoretical, high level and abstract. There are ways to better explain what we do,” Petracek said in the interview.

In addition to Petracek speaking, RISI’s Editor Greg Rudder addressed the audience with an update on recovered paper markets today. Rudder described a key market issue today is the decline in buying from China. “China’s buying from the U.S. fell 1.5 million tons since 2011,” Rudder said.

He added, “Imports from China continue to decline. Imports have gone down slightly overall, not just in the United States.”

In addition to the slowdown in buying from China, paper industry consolidations will continue and old corrugated containers (OCC) will increase, he said.

“What we have as of today is quite an increase of OCC,” Rudder said.

He added, “Mill buyers are bigger and more consolidated.”

As Petracek described, RISI publishes information about the global forest products industry. From price assessments and forecasts to mills and general news, the firm publishes information on finished paper goods and packaging as well as recovered paper.

The 2015 Paper & Plastics Recycling Conference was at the Marriott Downtown Magnificent Mile in Chicago. Next year’s conference will be Oct. 19-21 at the same venue. More information will be available at www.RecyclingTodayEvents.com as it is confirmed.